OP-ED | Connecticut’s health market regulation is broken

Ellen Andrews, Ph.D.

Connecticut’s healthcare markets are consolidating with a serious cut, and this is jeopardizing access to care and driving up health prices, making care unaffordable. Unfortunately, the state agency that is supposed to keep Connecticut’s healthcare market competitive is not acting. They have the tools – Connecticut has among the most protective laws in the country. But government regulators do not use them to hold large healthcare systems accountable, and we all pay the price.

When hospitals and practices merge into major healthcare systems, insurers and employers have fewer or no alternatives, and the systems can indicate their price. Connecticut’s healthcare markets are among the most consolidated in the United States. And the number of Connecticut practices joining major health care systems is growing. There is ample evidence that consolidating healthcare providers into major healthcare systems raises prices, does not improve quality, and reduces access to care.

The most important regulator to protect competition in the healthcare market in Connecticut is the state’s Certificate of Need (CON) process. Health facilities and systems wishing to expand or limit services must be licensed through the CON process operated by the Office of Health Strategy (OHS). The CON process is supposed to “improve access to and quality of healthcare and reduce the cost of promoting a competitive environment in the healthcare market.” However, they seem more interested in approving CON applications. From July 2016 to August last year, out of 74 CON resolutions, OHS approved all but three. It’s not regulation, it’s a rubber stamp.

A study published this month in Health Affairs, finds that Connecticut is among the three states with the most robust CON laws. However, market concentration in states with robust laws like ours grew just as fast as the rest of the nation between 2010 and 2019. In addition, health prices are 28% higher in states with robust laws and have increased just as fast as the rest of the nation. The problem is that regulators have not used the available legal tools to attach conditions to mergers that retain competition.

Unfortunately, OHS is not proactive in maintaining critical services, and even the conditions set by OHS for CON approvals are not enforced. In a classic conflict of interest, OHS usually allows hospital systems to select their own monitors to monitor compliance with the conditions of CON approvals. I do not let my students judge their own exams.

Recent closures of rural food centers in the state highlight the weakness of OHS regulation. Economic pressures are often cited as reasons for closing food units. Windham Hospital, part of Hartford HealthCare, has run its maternity center for years. One in four people in Windham live below the poverty line, and 82% of Windham’s OB / Gyn patients are on Medicaid, which pays lower prices. In 2019, when Sharon Hospital joined Nuvance Health, they promised OHS that they would continue to provide maternity and obstetric services for five years, but two years later, they will end this care for financial reasons. Last year, Johnson Memorial Hospital in Stafford, part of Trinity Health in New England, closed their maternity ward without applying for a CON as required by law. OHS is investigating. There are reports that women giving birth from rural areas have given birth on the road, traveling to distant hospitals.

Inefficient state regulation of Connecticut’s healthcare system is not a new problem. In 2016, the Malloy administration set up a task force to investigate how to get the CON process to maintain competition. After eight months of discussion in a committee, members recommended changes to state laws that redirected CON’s focus on keeping Connecticut’s healthcare markets competitive. In 2017, the legislature adopted these recommendations. Unfortunately, OHS will not use the tools to keep markets competitive and maintain critical community services.

Hospitals should be community care centers, not a collection of profit centers. Regulators need to mean what they say and hold regulated industries accountable. OHS must be brave, risk the discontent of a powerful industry and use the tools available to keep healthcare accessible and affordable.

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Ellen Andrews, Ph.D., is the CEO of CT health policy project. Follow her on Twitter @CTHealthNotes.

The views, opinions, attitudes or strategies expressed by the author are theirs alone and do not necessarily reflect the views, opinions or views of CTNewsJunkie.com.

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